Pockets of flat to moderately higher prices in the West were more than offset Thursday by occasionally flat but mostly lower numbers elsewhere. Most of the losses were around a dime or less, but ranged as high as 15-25 cents at Northeast citygates.

A wet and windy winter storm moving into the upper West Coast helped keep the Rockies and California from participating in the general softness. It was dumping snow into the higher elevations of the Sierra Nevadas and threatening flash flooding in the valleys.

However, winter-like weather was becoming just a memory in most of the rest of the continent. Even Calgary was above freezing, said a marketer who said his intra-Alberta upticks of C2-3 cents likely were a reflection of the screen’s initially bullish reaction to the morning storage report.

The Energy Information Administration said 27 Bcf was withdrawn from storage last week. The volume was near the high end of previous expectations and certainly a surprise to those who had been holding out hopes for one more small injection before withdrawal season got going in earnest. Futures traders jumped on the report with bullish fervor, quickly driving the December gas contract up more than a dime.

But the Nymex momentum faded, and the screen eventually wound up the day down 2.3 cents. An eastern LDC buyer commented, “I guess people were brought back to reality by the mild weather forecasts through next week.” Another source linked the gas screen’s retreat to weakness in crude oil and heating oil futures, noting that OPEC was indicating it may raise world oil production, even with some members already exceeding their quotas. He also cited the United States and United Nations coming a little closer together on an Iraq resolution, which diminished the war threat premium for oil prices.

Prices “went crazy” after the storage report was released, according to a producer. The screen shot up a dime or more, and most cash points jumped up, but then came down, he said. Henry Hub and Transco Station 65 stayed up, “due to shorts, but mostly just the Hub was up.” That 27 Bcf withdrawal was surprising, the producer added. “It will be interesting to see where the report comes out next week if temperatures rise into the upper 60s” as predicted. Load should be weak, although traders may have to pay back some deals to the pipe.

Traders had little doubt of softer prices Friday based on several factors: futures failing to sustain their advance; feeling higher outside temperatures directly and seeing forecasts for more of the same; and the typical slump in weekend demand. “It’s warming up today [Thursday] in the Chicago area and should be very nice there over the weekend,” said one source. “Sounds like a good bet to me for lower prices.”

A Northeast trader reported getting a modest premium for an intraday deal at the Algonquin citygate because frigid and snowy weather remained in parts of New England Thursday, but said a moderation period would begin in the region Friday.

“There’s so much available [Florida Gas Transmission] capacity out there” that the Florida citygate market was virtually non-existent Thursday, a marketer said. The pipeline ended an OFO-like notice (see Transportation Notes), and the marketer and a Florida utility buyer said they were unaware of any cuts in MOPS deliveries into FGT in Zone 1. The buyer said it had cooled off enough in Florida that almost no air conditioning load was left.

“It seems like a real slow month in the market right now, and lighter weather conditions upcoming should keep it slow,” a marketer commented.

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